Place identities and narratives in local development

While the prevailing economic study of narratives focuses on the ability of viral stories to influence economic decisions, we explore narratives as an indispensable tool for shaping, maintaining and modifying social identity, and thus to facilitate group aggregation and collective action. In the conceptual approach we suggest, narratives are persuasive stories about how reality works and about our position in the becoming of this reality; they are impure public goods that, in the case of local development, take the form of club goods and specific public goods. These two types of goods require costly barriers to access, that contribute to preserve the distinction between activities in the local community and those outside it. The policy-maker can vary these barriers to favor or disfavor the leveling off between local and global narratives. Our approach thus helps to explain both the formation of local communities and the possibility of interventions to change their relationship with other communities.